According to ANZ Economists, the RBA is likely to follow up today’s move with another cut in March.
Key Quotes
"The tone of the Statement was more dovish than we had expected with obvious concern for underlying growth in domestic demand. The Bank has clearly made a wholesale reassessment of its growth outlook and now expects growth to continue at a below-trend pace for longer and unemployment to peak at a higher rate."
"Although the forward guidance is not strong, with the key ‘period of stability’ reference now gone we expect another 25bp cut in March."
"Our reading of today’s statement is that the RBA is likely to follow up today’s move in March and it therefore does raise the possibility, at least for market expectations, of a cash rate below 2% this year."
"We will wait for Friday’s Statement to review the RBA’s new forecasts for inflation and growth. This, as well as further colour on the Bank’s new thinking on the domestic growth outlook, will be the key to gauging the extent of further monetary stimulus the RBA is currently contemplating, but at this stage the significant downgrade to the growth outlook suggests that more than 25bps of further monetary policy easing could be on the cards."
Key Quotes
"The tone of the Statement was more dovish than we had expected with obvious concern for underlying growth in domestic demand. The Bank has clearly made a wholesale reassessment of its growth outlook and now expects growth to continue at a below-trend pace for longer and unemployment to peak at a higher rate."
"Although the forward guidance is not strong, with the key ‘period of stability’ reference now gone we expect another 25bp cut in March."
"Our reading of today’s statement is that the RBA is likely to follow up today’s move in March and it therefore does raise the possibility, at least for market expectations, of a cash rate below 2% this year."
"We will wait for Friday’s Statement to review the RBA’s new forecasts for inflation and growth. This, as well as further colour on the Bank’s new thinking on the domestic growth outlook, will be the key to gauging the extent of further monetary stimulus the RBA is currently contemplating, but at this stage the significant downgrade to the growth outlook suggests that more than 25bps of further monetary policy easing could be on the cards."
